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Soft-Drink Makers Plunge on Surprise U.K. Budget Sugar Levy

Bloomberg
16 Mar 2016
Health and social care
sugar, tax

Companies that profit from Britain’s sweet tooth plunged as the U.K. unveiled a sugar tax, a surprise move that adds another burden to food and beverage companies grappling with marketing restrictions and a shift toward healthier fare.

Soft-drink makers Britvic Plc and A.G. Barr Plc both declined more than 5 percent in London, while ingredient suppliers Tate & Lyle Plc and Associated British Foods Plc fell as much as 4.9 percent and 1.5 percent, respectively. U.K. Chancellor George Osborne said the levy on the soft-drinks industry will be introduced in two years’ time, in two bands depending on how much sugar is in a drink. The tax will raise 520 million pounds ($732 million) in its first year, according to government estimates, part of which will go to schools to promote healthier lifestyles.